India Public Policy Report 2014: Tackling Poverty, Hunger and Malnutrition
Rajeev Malhotra
Oxford
R745
Pp 249
AN ISSUE often debated is the effectiveness of various state governments in bringing about growth and development in their respective territories. It is but natural that every state tries to show that it has achieved more than the others, with statistics normally used to support these claims. Almost every government official will vouch for the state’s resolve to bring about rapid social and economic development. So how do we know where each state stands? It is here that Rajeev Malhotra addresses the issue in a very balanced manner and creates a Policy Effectiveness Index (PEI) to show how states have progressed and performed over a period of almost three decades: 1981, 1991, 2001 and 2011.
The author uses four parameters in this index. The first is livelihood opportunity index, which encompasses employment and its quality. The second is social opportunity index, which takes in education, health and standard of living. The rule of law index is the third component, which looks at crime, law and enforcement. The last, physical infrastructure development index, looks at civic amenities, connectivity and housing environment. This approach is extremely pragmatic because it actually looks at what people like you and I expect from any regime in terms of governance. At the end of the day, it poses a question as to whether or not individuals are better off and hence looks more at the micro than macro issues.
Malhotra’s conclusions are both interesting and disturbing. There appears to be a very gradual change in the PEI over the years at the national level. The index is down due to limited traction in the livelihood and rule of law indices, while we do better in terms of social and physical infrastructure. Further, the best-performing states are the smaller ones like Sikkim, Mizoram and Goa. Among the bigger ones, Punjab and Himachal Pradesh do better. The traditionally weaker states like Bihar, Madhya Pradesh and Odisha continue to fare low down the order with high poverty, weak laws and low social opportunities. In a way, these conclusions rebut a lot of claims made about
the turnaround in some of these states.
The problem with employment is that the non-agri sector is not able to keep pace with the creation of jobs, and hence migration is taking place from rural areas. The only sector that is absorbing such labour is the construction industry. Here, the north-eastern states also perform low, as they do not have the bandwidth to provide such jobs.
The author is more positive when it comes to improvement in social opportunities with the National Rural Health Mission being singled out for playing an important role here. This has helped in the relatively backward states like Bihar, Assam, Rajasthan and Uttar Pradesh.
These results should hopefully be looked at closely by all state governments, so that they can work towards improvement in areas where they fall short. Very often, any ranking of states is based on very macro features, which look good, but do not really reflect the quality of life. Given that most government expenditure is directed towards improving this quality, a proper audit needs to be performed against these results.
This report is a must-read for all state government officials, as well as economists who believe in the trickle-down process. Often, we look at reforms and their impact on the life of the top percentile of the population and ignore the rest. That is the problem with economic statistics where the macros do not reflect the micros. Malhotra, a government official who has worked with the earlier finance minister, as well as in the Planning Commission, has provided brilliant insights and probably a different and more relevant way of evaluating policy in his report. He does point out at the beginning that a lot has been achieved and we should not let the issues of corruption or policy inaction blur the image. In that respect, he is sanguine of the future. But surely, we also need to look at the quality at the micro level. This is pertinent, as even the new government is talking a lot on inclusive growth and social progress. We need to go beyond just words.
Rajeev Malhotra
Oxford
R745
Pp 249
AN ISSUE often debated is the effectiveness of various state governments in bringing about growth and development in their respective territories. It is but natural that every state tries to show that it has achieved more than the others, with statistics normally used to support these claims. Almost every government official will vouch for the state’s resolve to bring about rapid social and economic development. So how do we know where each state stands? It is here that Rajeev Malhotra addresses the issue in a very balanced manner and creates a Policy Effectiveness Index (PEI) to show how states have progressed and performed over a period of almost three decades: 1981, 1991, 2001 and 2011.
The author uses four parameters in this index. The first is livelihood opportunity index, which encompasses employment and its quality. The second is social opportunity index, which takes in education, health and standard of living. The rule of law index is the third component, which looks at crime, law and enforcement. The last, physical infrastructure development index, looks at civic amenities, connectivity and housing environment. This approach is extremely pragmatic because it actually looks at what people like you and I expect from any regime in terms of governance. At the end of the day, it poses a question as to whether or not individuals are better off and hence looks more at the micro than macro issues.
Malhotra’s conclusions are both interesting and disturbing. There appears to be a very gradual change in the PEI over the years at the national level. The index is down due to limited traction in the livelihood and rule of law indices, while we do better in terms of social and physical infrastructure. Further, the best-performing states are the smaller ones like Sikkim, Mizoram and Goa. Among the bigger ones, Punjab and Himachal Pradesh do better. The traditionally weaker states like Bihar, Madhya Pradesh and Odisha continue to fare low down the order with high poverty, weak laws and low social opportunities. In a way, these conclusions rebut a lot of claims made about
the turnaround in some of these states.
The problem with employment is that the non-agri sector is not able to keep pace with the creation of jobs, and hence migration is taking place from rural areas. The only sector that is absorbing such labour is the construction industry. Here, the north-eastern states also perform low, as they do not have the bandwidth to provide such jobs.
The author is more positive when it comes to improvement in social opportunities with the National Rural Health Mission being singled out for playing an important role here. This has helped in the relatively backward states like Bihar, Assam, Rajasthan and Uttar Pradesh.
These results should hopefully be looked at closely by all state governments, so that they can work towards improvement in areas where they fall short. Very often, any ranking of states is based on very macro features, which look good, but do not really reflect the quality of life. Given that most government expenditure is directed towards improving this quality, a proper audit needs to be performed against these results.
This report is a must-read for all state government officials, as well as economists who believe in the trickle-down process. Often, we look at reforms and their impact on the life of the top percentile of the population and ignore the rest. That is the problem with economic statistics where the macros do not reflect the micros. Malhotra, a government official who has worked with the earlier finance minister, as well as in the Planning Commission, has provided brilliant insights and probably a different and more relevant way of evaluating policy in his report. He does point out at the beginning that a lot has been achieved and we should not let the issues of corruption or policy inaction blur the image. In that respect, he is sanguine of the future. But surely, we also need to look at the quality at the micro level. This is pertinent, as even the new government is talking a lot on inclusive growth and social progress. We need to go beyond just words.
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